DAP ruling drags growth of Cordillera economy

BAGUIO CITY—The Cordillera economy slowed down in 2014, and government economists said one of the reasons was the Supreme Court’s declaration that the Disbursement Acceleration Program (DAP) was unconstitutional.

The DAP had financed projects in the region, but the scheme was stopped or suspended last year due to the high court’s ruling, which could have affected growth, said Jedidia Aquino, Cordillera assistant director of the National Economic and Development Authority.

Aquino and officials of the Philippine Statistics Authority (PSA) presented the state of the Cordillera economy at a Thursday news conference. They announced that the region’s gross regional domestic product (GRDP) dropped from 5.4 percent in 2013 to 3.2 percent in 2014.

The GRDP represents the value of goods and services produced by Cordillera provinces that defines the region’s economic performance.

PSA Cordillera Director Olivia Gulla described the region’s growth pattern as erratic, beginning with a 1.5 GRDP in 2011 to a 2012 slump at 0.5 percent, to a robust growth in 2013, only to plunge once more last year.

Aquino noted that government expenditures on infrastructure were significantly high in 2014.

“Construction was brisk [in 2014], but on that same year, the DAP was questioned before the high court, and suddenly [our] central agency offices asked us to determine if projects here were financed through the DAP at the request of the Commission on Audit,” she said.

She said most regional offices were not aware that their projects were DAP-facilitated and some did not proceed once this was established. The government eventually allowed agencies to proceed with DAP projects that have reached or surpassed 85-percent completion, “but those that were not started were dropped,” she added.

Benjamin Navarro, PSA Cordillera chief of the statistical operations and coordination division, said the government raised infrastructure allocations by as much as 100 percent in 2014, with a P7.3-billion outlay compared to P3.6 billion in 2013.

The construction sector performed well in 2013 at 18.4 percent, but growth fell last year to 11.2 percent. The gravel business, however, earned big last year due to the construction activities, pulling up the growth rate of the mining and quarrying sector from 9.3 percent in 2013 to 12.4 percent in 2014.

Aquino also attributed the Cordillera’s performance to a tapering in investments from the information technology sector, as well as poor demand for electronics and semiconductor products by Texas Instruments Philippines Inc. (Tipi) at the Baguio City Economic Zone.

Half of the region’s economy relies on manufacturing, but Tipi’s Clark facility has been drawing most of the business that used to be cornered by its Baguio unit, Aquino said.

Agriculture was also a poor performer, with negative 0.4-percent growth.